Ron Galella: Disco YearsA larger than life homage to the personalities and habits of Studio 54's most infamous patrons. A fascinating document of American culture's excess and quest for self expression.

May 2009

May 04, 2009

Starbucks response (going on the offensive, challenging its rival's "quality") doesn't make sense - it makes them looked scared, and they're actually in a position of strength: they're the premium brand. Economies go up and down, premium brands stay beloved, but only as long as they seem up to date.

McD's will upsell the new beverages to existing young (particularly ethnic) target - which is a cheaper and easier way to drive increased topline sales in a recession. That is, if people can understand the campaign. I think the campaign really lacks "conversationality" - the "e" thing is hard to say, the idea's not intuitive, it's even potentially a socially risk (what if you mis-pronounce it?)

Starbucks behavioral problem is consumers cutting out a visit a week. Consumers are doing this because they feel guilty about the sneaking suspicious they might have been wasting money on coffee for the past several years. McDonald's prices aren't lower enough to induce a brand switch, or probably even trial. Plus the McD's brand is all wrong for Starbucks - it's too young, too trendy and pop, not sophisticated enough. It's not a badge for young professionals grasping for prestige in a contracting economy and dreading potentially dwindling career prospects. Buying McDonald's is an admission that the dream hasn't worked out. People don't want to go there.

Starbucks needs to give brand lovers a reason to visit the store that's cheaper, or at least makes them feel like they're not wasting as much money as they have guiltily been for the past several years. That addresses the guilt thing. What if Starbucks invited people to come by the store even when they don't need a coffee, just to come on by, hang out, use the WIFI, whatever. Build the community piece of the brand, not the product piece. Remind the core Starbucks consumer of the value the brand brings to their lives - to inoculate them from the visit-cutting guilt they are feeling.

Better yet - what about sponsoring some online networking for folks looking for work? Unlocking the power of Starbucks nation around an issue that's driving the decrease in visits makes a ton of sense.

TV ads aren't the answer here. Starting with the customer is.

This WSJ article has the creative as well as a number of thoughtful points: